Lansdale man accused of multi-million-dollar mortgage fraud

A self-employed tax accountant living in Lansdale has been charged in federal court with conspiring to defraud lending agencies of more than $20 million in a massive mortgage fraud conspiracy.

Willie G. Manley, Jr., 62, was indicted Wednesday on one count of conspiracy to commit loan and wire fraud, three counts of loan fraud, one count of making a false statement in connection with a Federal Housing Administration loan, two counts of wire fraud, and aiding and abetting in U.S. District Court, according to an announcement by Zane David Memeger, the U.S. Attorney for the Eastern District of Philadelphia.

If convicted, Manley — listed in Montgomery County property records as an owner of a home in the 800 block of Monticello Place in the borough — could face a maximum possible prison sentence of 137 years, five years supervised release, restitution of up to $13.7 million, a fine of up to $4 million and a $700 special assessment, according to court papers released by the U.S. Department of Justice.

The fraud scheme — which operated between May 2004 and February 2009 — involved more than 100 properties, primarily in the West Philadelphia section of Philadelphia, according to a news release provided Thursday by Patty Hartman, a spokesperson for the federal court.

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Manley — who was working at a local tax preparation service — conspired with at least 12 other people to submit the fraudulent loan applications, according to court papers.

Working with four of the co-conspirators who founded KREW Settlement Services — a settlement company in Philadelphia — Manley is alleged to have created false income documents, such as W-2 forms, pay stubs, and Form 1040 income tax returns that were submitted to lenders to help induce them into issuing mortgages for the properties, according to Hartman.

According to Hartman, the other co-conspirators allegedly included an appraiser who issued grossly inflated appraisals, a title agent who created false title insurance policies, contractors who submitted false receipts to show home repairs that had never been done, and numerous straw buyers whose names and identities were used to purchase the properties.

In addition, these fraudulent loan applications were also typically supported by false appraisals prepared by or with the consent of corrupt appraisers that grossly overstated the market values of the properties, according to court records.

Manley has not been arrested and is not in federal custody, according to Hartman.

She said an arraignment will be scheduled by the judge who will be assigned to the case.

The case — investigated by the U.S. Federal Bureau of Investigation, the U.S. Internal Revenue Service Criminal Investigations, and U.S. Department of Housing and Urban Development’s Office of Inspector General — is being prosecuted by Assistant U.S. Attorney Michael S. Lowe, according to Hartman.